Disturbance of the dynamic balance between protein tyrosine phosphorylation and dephosphorylation is crucial for the development of many serious conditions, including cancer, diabetes, and autoimmune disorders. This is the first time that tyrosine phosphatase inhibitors are being proposed to improve cognitive function in Alzheimer's disease (AD). STriatal-Enriched Phosphatase (STEP) is a brain-specific protein tyrosine phosphatase that is highly expressed in regions where consolidation of memory occurs and regulates the internalization of NMDARs. Our recent work demonstrates that STEP is elevated in the prefrontal cortex of human AD patients and in animal models of AD. Moreover, using genetic manipulations to reduce STEP activity in a triple transgenic AD mouse model, we showed that a decrease in STEP levels attenuates the cognitive and cellular deficits observed in six-month old 3xTg-AD mice. The hypothesis that STEP inhibitors may prove therapeutic for the treatment of AD is a shift in the current paradigm of reducing Abeta levels to inhibiting a downstream target of Abeta. The recent failure of the gamma-secretase inhibitor semagacestat in phase III clinical trials suggests that other approaches are clearly needed. This proposal seeks to generate the first STEP-specific inhibitors. Besides a screening ready HTS assay, we also have a secondary assay, profiling assays, as well as cell-based and in vivo assays in place to verify, characterize, and prioritize hits. We have milligram amounts of highly pure STEP in hand, so that HTS for STEP inhibitors could commence immediately.